For a patient considering a medical malpractice lawsuit, a paramount question might be, “How much will hiring a lawyer cost me?” The answer might be quite encouraging for many patients who have suffered harm through the provision of sub-standard health care. That's because medical malpractice attorneys often offer free initial consultations during which they discuss what the process of suing might look like, as well as the individual patient’s likelihood of success. Then, if the lawyer takes the case, the lawyer usually will not require any payment until the case is resolved (and even then, the lawyer is often only paid if the plaintiff recovers money from the defendant).
In the sections that follow, this article discusses common fee arrangements between patients and their lawyers, important considerations for patients, and legislative efforts to alter medical malpractice fee arrangements.
Common Medical Malpractice Fee Arrangements
Most medical malpractice lawyers use contingent fees. When a lawyer uses a contingent fee, the lawyer’s entire fee is paid as a percentage of the award or settlement in the case. So, if the case goes to trial and the patient loses, the lawyer is never paid a fee.
The portion of the award that goes to the lawyer can vary, but the most common contingent fee is 33% of the award or settlement. Some arrangements might use different numbers for different circumstances. For example, an arrangement might provide for a 33% contingent fee if the case settles before trial or a 40% contingent fee if the case goes to trial.
Another issue is who pays the costs of the litigation, which can be substantial. These costs include the cost of hiring an expert witness, court filing fees, and the cost of obtaining medical records from hospitals. Many lawyers use agreements that provide that the lawyer will pay for costs of litigation, at least initially.
So, as an example, a patient and a lawyer might agree on a 33% contingency fee, with the lawyer shouldering the costs of litigation (at least "up front"), but in the event that the litigation is successful, the costs will come out of the award first. Assume the case settles for $100,000, and the costs of the litigation were $10,000. In such a case, the lawyer would be reimbursed for the costs of the litigation out of the settlement money, leaving $90,000. The lawyer would then take the contingency fee of $30,000. The patient would be left with $60,000.
Important Considerations for Patients
The most important thing for every patient to remember is this: attorney’s fees are negotiable. If you are considering hiring a particular lawyer, you should ask yourself, “Why am I hiring this lawyer?” “Is this the best, most experienced lawyer?” “Would a different lawyer offer a better price?”
Why doesn’t every patient consult five different lawyers and compare prices and qualifications? Although patients generally do not do it, there is absolutely no reason why patients with potential medical malpractice cases should not shop around for attorneys. Remember, initial consultations are generally free.
Not only is the fee percentage negotiable, but other terms are also negotiable. For example, a lawyer might propose an agreement that requires a patient to pay for litigation costs as they arise. In that situation, the patient might consider engaging in a bit of bargaining, telling the lawyer that better terms are likely available elsewhere, and that it would be preferable if the lawyer took care of the costs of litigation "up front," with the understanding that those costs would be reimbursed to the attorney if the plaintiff receives a judgment or settlement award in his or her favor.
Legislative Efforts to Affect Medical Malpractice Fee Arrangements
Some medical malpractice reform pundits have argued that large contingency fees help drive up the cost of healthcare. As a result, some states have passed laws restricting contingency fees in medical malpractice cases. Some of these states include California, Florida, Connecticut, Tennessee, and Wisconsin.
The details of the laws that have been passed vary, but some of the laws are very simple. A law might simply ban all attorneys’ fees greater than 1/3 of the amount of the award, for all medical malpractice cases.
Other laws are more complicated. For example, a California law passed in 2002 limited attorneys’ fees in medical malpractice cases to 40% of the first $50,000 recovered, 33% of the next $50,000, 25% of the next $500,000, and 15% of any amount over $600,000.
Regardless of the regulatory framework in any given state, it is important for the patient to remember that fees are negotiable. Even if fees are capped by statute, a patient is entitled to negotiate a lower fee.